Feature Spotlight: Davidson Wicker, CEO of Ravetree

As those of you who have known us over the last few years are aware, The Bookkeeper grew quickly. When new employees were brought on board, it became obvious that our old, piecemeal system of digital file storage in one location, a time tracking app in another, and endless emails detailing project updates, would not be sufficient as we scaled.

We were fortunate to come across Ravetree in its early days, and to have the opportunity to adopt it to our business. It has been a true "game-changer" for us, and has really allowed us to stay on top of all of our client and operational needs, even during rapid expansion.

I got to ask Ravetree CEO Davidson Wicker a few questions about himself, his company, and their product.

Ravetree Logo

Courtney: I saw that your educational background is in Applied Physics. How did you transition that into a career in software development?

Davidson: I taught physics for a couple of years as I was building up my coding skills. We did some scientific programming in grad school, so that's where I started to get a taste of how fun programming could be.

 

Courtney: Was there a lightning strike, "Eureka!" moment that led to the idea behind Ravetree?
Davidson: I had the idea for Ravetree for a long time. It kind of started with the idea of a cloud-based "operating system" for businesses.
 
Courtney: How did the name "Ravetree" come about?
Davidson: Originally, Ravetree was going to have review capabilities, where users could "rant & rave" about things. And a tree is a kind of data structure. The two words fit together nicely, and the domain name was available, so the name stuck.
 Ravetree Screenshot
Courtney: In your Medium article, 3 Tools Every Agency Needs, you listed Project Management Software, Capacity Planning Software, and Time Tracking Software. I'm familiar with using Ravetree for project management and time tracking, but is there a way to use it for capacity planning as well?
Davidson: Ravetree has really powerful capabilities in terms of capacity planning. Users can view a list of all of their employees and see how many hours of capacity they have remaining. This makes it easy to see when you can take on more work, and if your employees are over or under utilized. We provide a lot of customization around this feature. For example, you can specify what a work week is for each employee, and what a work day is. Some employees may not work a standard Monday through Friday work week, and may be part time. All of that can be set up in Ravetree.
 
Courtney: As we've discussed, my only real "complaint" with Ravetree has been that it's so all-encompassing that I often feel like I'm not utilizing it fully or that there are things I'm missing. What is the best way for a new user to learn Ravetree?
Davidson: Admittedly, we need to get better at providing online training materials, but we do have some tutorial videos. For most of our clients, we get on a few WebEx meetings to give them a walk through. This seems to work well, but definitely won't scale as we continue to grow.
 Ravetree Screenshot
Courtney: In their feature on Ravetree, Forbes wrote that you have created a "software to help businesses transition their entire operations from waterfall to agile." That is a big task. How can businesses use this tool to transform their operational mindset to "agile" thinking and work behaviors?
Davidson: We're not in the business of training people on how to be Agile, or convincing them that they should embrace Agile. Fortunately for us, a lot of companies have already embraced Agile, as they recognize the numerous benefits of taking an Agile approach. Ironically, several of our customer are not Agile at all. What this tells us is that Ravetree isn't overly opinionated, and will allow non-Agile companies to derive value from our platform.
 
Courtney: Is there anything upcoming in Ravetree that you can share with the public?
Davidson: We are constantly getting user feedback and improving our platform. Some of the newest features we've added are: Custom Dashboards, Client portals, File approval workflows, and digital asset management. All of these updates came from customer feedback. Once thing that I find humor in is that a lot of people in the start up community would tell us "you're boiling the ocean", or "stop adding new features". We heard this a lot when we didn't have any customers. But, what we found out was that customers wanted an all-in-one full-featured solution, so we kept building out our platform. Then, all of a sudden we started landing customers, then more customers. Our early prospects kept saying, "you're almost there, but we want to see more." This is 100% the opposite of all the advice I was receiving.
 Ravetree Login
Ravetree has become an essential part of our day-to-day operations. If you'd like to try Ravetree for your business, visit www.ravetree.com/request-a-demo and request a free demo.

Staying (Financially) Fit Over the Holidays

With Halloween only 12 days away, we are officially in the holiday season. This is my favorite time of year, and I understand the temptation to let work slide as I give into the distraction of Thanksgiving, Christmas, and vacation.

But holiday season coincides with year-end and, for businesses, this needs to be a time of focus. Just as it's easy to undo months of dedicated diet and exercise with the wild abandon of the holidays, it's easy to let your business financials slip at the time when you really need them at their peak.

Here are a few common bookkeeping issues we see in Q4 year after year, and how to avoid them.

Missing Deductible Expenses

Christmas GiftsThe holidays are a great time to let loose and be more sociable with co-workers, clients, and referral partners. But just as you lose count of how many calories you're taking in, you can lose track of the money you're spending. Not only can this result in overspending, of course, but you can also be missing out on deductible expenses that will save you money in just a few months at tax time.

Perhaps you're planning an office Christmas party for your staff. Not only would those expenses be deductible, even food purchased for a potluck, but any staff appreciation gifts you'd like to hand out, as well. The same goes for client or vendor appreciation gifts. (If you have someone external doing your books, be sure they're asking about purchases for things like massage gift cards and fruit baskets, and recording them as business expenses, not draw activity.)

Many networking groups hold a special holiday party. Not only would any food and drink you purchase for that be deductible, but also mileage to the event. If you're having trouble keeping up with your mileage, something as simple as a mileage log (free to download here) in your vehicle or as sophisticated as an app can do wonders to help you track that.

Whatever you do, be sure you're keeping proper record of your business expenses, even while you party it up.

Falling Behind on Bookkeeping

Christmas TravelBetween parties, travel, and employees being out sick from all the germs they picked up partying and travelling, it's easy for certain tasks to get a bit behind in the later part of the year. However, bookkeeping is not like cleaning the house; you can't just plan to catch it all up at once. If I don't clean my house for a month, it's not that much more difficult, proportionately, than if it's not cleaned for a week. Bookkeeping doesn't work that way. If your bookkeeping takes four hours a month and you fall three months' behind, you now have twelve hours worth of bookkeeping to do. (And finding twelve hours for a task you like is difficult enough; imagine trying to find half an entire day to dedicate to a task you dislike.)

Many business owners who find themselves in the position of staring down months of untouched financials make the decision to get some outside help, just to catch things up. The problem is that they're in good company. Beginning in November, professional bookkeepers get very busy with new clients who are hoping to get their books cleaned up for year-end. Not only is there an influx of new clients, but existing clients continue to need service, and we're busy getting all of their year-end documents ready as well. Many of my friends who work solo or operate smaller firms do not take on any new work during this time of the year.

If you aren't certain that you'll be able to keep up with your financials on your own during the holiday season, begin seeking assistance now, before you get too busy.

Not Preparing for Next Year

(NOTE: If you are one of those people who files an extension out of habit, this is for you.)

Get Fit NowYou may not realize it, but there is a lot you can be doing right now to get ready for next year's tax season.

Just like you don't have to wait to make a New Year's resolution to start getting fit, you don't have to wait for January 1st to start getting your books in shape for tax season. For starters, you can be preparing for the January payroll reporting rush. In the chaos of year-end, many business owners forget that 1099s and W-2s are due at the end of January, and not in April. To prepare, you can be sure that you have W-9s, W-4s, and any required state tax documents on hand now, instead of trying to get them from workers later. (This is especially true of 1099 contractors, as they may work for you for a much shorter season and can be harder to track down later.)

If you have been using an outsourced payroll system, be checking now to ensure that the payroll reports in your financials match those provided by the vendor. Sometimes errors do occur, and you will need to alert the payroll company right away if their totals are incorrect. (Like bookkeepers, they are getting very busy this time of year, too.)

You want to check to make sure that your sub-ledger totals, such as your Accounts Receivable and Accounts Payable, match your General Ledger balances. You also want to be sure that you are up-to-date on any reconciliations.

Finally, it's a good idea to take some additional tax-sheltering steps. For example, if you had a good year and are cash-basis, consider making a large business purchase in December instead of January, to reduce your taxable income. Or maybe you have not been paying enough into your withholdings or your quarterly estimated self-employment taxes, and need to increase those in December. There are many options available to you, but you need to act now.

Fortunately, you still have some time to make the most of your holiday season. Stay on top of your books as you go, and you will have a restful and relaxing January (at least compared to everyone who didn't put in the work during December). If you need help, we are always available.


Why "Cheap & Easy" Online Bookkeeping Services are Neither

Online "full-service" bookkeeping companies have been on my mind a lot lately. Mostly, it's because we've recently had to do so much clean-up work for clients who have previously used these services to keep their books.

Over the past week alone, we've started working with three different clients who previously employed three different online accounting services. All three have told us, separately, how the solution that was supposed to save them money and make their life easier ended up costing them hundreds or thousands of dollars for incomplete, inaccurate financials.

So, if bookkeeping is really just a matter of putting the right numbers in the right spots, how is it that these companies are falling so short of the mark? Let's look at a comparison of how an internet bookkeeping company works versus how we work.

Love TechnologyUtilizing technology vs. relying on technology.

I won't be a hypocrite; I love technology, and we use it at The Bookkeeper to make our work faster and more accurate. (We even have clients in other areas of the country, with whom we've never met in person.) However, trusting technology to make the correct judgment calls, without checking behind it, leads to errors. Online bookkeeping services enter transactions based on vendor defaults; for example, this can lead to a $10,000 bank transfer being labelled as a "bank service charge", because the bank is listed as the vendor in the downloaded transaction description, and that's where it defaults. An expert familiar with the account is going to be well aware that the $10,000 is not a service fee, and will assign the transaction appropriately. And speaking of experts...

Young WorkersHiring the best people vs. hiring the most people.

One of the things I am most proud of in the growth of my company is the team we've assembled. We have some very experienced people, and everyone is focused on constant education and improvement. We offer better benefits than our direct competitors, and do a lot to ensure that our employees have a clear path to growth within the company.

When I first started seeing the product being put out by these online bookkeeping companies, I was curious about what it must be like to work there. I went to Glassdoor and read some reviews by current and former employees, which confirmed a lot of my suspicions. Even the positive reviews spoke of their company as a "great stepping stone" to employment in a more traditional firm. Several employees spoke of it being their first job after graduation. I'm glad that there are good employment opportunities for young bookkeepers, but I don't feel that I would want them to be the point person responsible for a client account.

Inclusive service vs. charging for "add-ons".

Possibly due to the fact that their employees have less experience, online bookkeeping services do not offer full bookkeeping to the degree that a traditional company would. Most do not allow for entering invoices, bills, line of credit, fixed assets, nor payroll; if they do offer these services, it is at steep surcharges. (One company offers payroll for up to only three employees for $100 a month!) We recognize that things like bill-pay, tracking receivables, filing sales, recording depreciation, etc. are all necessary for truly accurate financials, and should be included as a part of the original agreed-upon rate, without being snuck in as a costly "add-on". Speaking of pricing...

Money GrubbingCharging for the work done, instead of how much you think the client can afford.

I am always suspicious of companies which offer pricing based on monthly expenses or revenues in dollar amounts. Here's a secret: larger companies aren't always more work. Imagine a client who is a business broker; this client might make $20,000 in one month, but it might be on only one sale! Now imagine a client who is a dry cleaner; the dry cleaner might make less than half of that, but it could be in hundreds of transactions. Which one do you think takes more time for the bookkeeper to enter? One transaction, or hundreds?

Businesses who charge based on amount of money passing through the client's account are often just trying to see how much they can get away with charging. They know that a client who only spends a few thousand dollars a month will not want to see a large proportion of their budget go to a $450/month online bookkeeping solution. Likewise, they know that a client spending $100,000 a month will not notice that amount to the same extent. It is, in my opinion, a deceptive marketing practice.

Proactive vs. reactive service.

Most online bookkeeping companies ask clients to submit bank statements at month-end, and then just download the transactions into the system at that time. As we've discussed before, we get into client accounts, at minimum, twice a week, to help monitor cash flows, identify potential problem areas, and review areas of improvement. This allows for timely and therefore relevant information, as well as allowing us to compile period-end financials much more quickly, since most of the work is already done by the time the month closes.

This is not to say that online bookkeeping services can't be helpful in select situations. If a client has a high number of very basic transactions, with no fixed assets nor liabilities, and no interest in tracking invoices nor bills, no payroll, and no sales tax, an online solution might be more cost-effective for them. However, I would highly encourage anyone else to get a second consult before signing an agreement with an online-only bookkeeping company.


Local Entrepreneur Spotlight: An Interview with Dave Baldwin of Baldwin Management Consultants

Baldwin Management ConsultantsCourtney recently sat down with Dave Baldwin, of Baldwin Management Consultants, in Raleigh. From his website: "Dave Baldwin is an experienced marketer and self-taught entrepreneur who first went into business for himself in 2007 after ten years in the technical field, spurred on by a desire to help introverted entrepreneurs succeed in business. Dave has worked with clients in a variety of different industries."


 

Courtney: I can't start without asking about "Let's Not Have Coffee". Why do you think that piece has become so popular so quickly?

 

Dave: From what people have told me, it struck a nerve with a number of folks. Anyone who has ever sat down and had coffee with someone and felt like they wasted time can understand that. At some time or another, we've all been there: sitting in a meeting and wondering, "Why am I here?" Also, some folks who are new to networking groups tend to copy what everyone else is doing. I often run into people who say they want to "have coffee" without giving any thought to what they want to talk about, what the purpose of the meeting is, or the expected outcome or next steps. Time is not free, but people act as if they had endless amounts of it to spend. Entrepreneurs can network their way to the poor house if they're not careful about this.

 

Courtney: I agree completely.  Unproductive meetings are an incredible time-suck for business owners. Moving on to what you do in your business...The word "consultant" can mean a lot of things nowadays. Can you describe what you do in 10 words or less?

 

Dave: I help people start businesses and grow businesses.

 

Courtney: Okay, and if you're allowed more than ten words?

 

Dave: My vision is making entrepreneurship accessible to people who classically have not had access to it for a variety of reasons. For instance, women have told me they feel they are not taken seriously by men in networking groups. Ethnic minorities have expressed frustration about how they are treated. I personally found that being an introvert worked against me back in 2007, because if you aren't talking a lot and shaking every hand in the room, people will perceive that as a lack of self-confidence.

 

Courtney: Business ethics and social consciousness come up a lot in your talks and writings. Is there any particular life experience that drives that?

 

Dave: If there's any experience that really ties this all together, it was the experience of going through my early life feeling like a second-class citizen. Starting from going to school as a child, through my adult career life, feeling like I was passed over for promotions because I didn't know how to ask for what I wanted. I didn't know how to use effective body language, how to project the right tone of voice, or how to communicate effectively. I found that people who knew how to say the right thing in the right way to the right person at the right time were more likely to move ahead, even if they were the least qualified for the actual job. I wanted to create tools to help the quiet people with rich undiscovered talent, which is what led me down this path.

 

Courtney: Do your customers face those same "pain points"?

 

Dave: There are two types of businesses I like to work with.

 

I love to work with established businesses in growth mode with a small handful of employees, when they're expanding the size of their teams. Any business that's hiring has the same pain points. They have trouble retaining employees because there's not an effective system in place. They don't delegate effectively and they rely on verbal instructions instead of writing. The business owner forgets what they told an employee to do, or the employee doesn't understand what they are supposed to do. Business owners tend to overestimate their employees' ability to self-manage. Sometimes it may be a matter of weeks or months until the disconnect is identified and the business owner realizes that things are not getting done. By that point, the situation is usually well out of hand.

 

In a start-up business, the biggest problem I see is confusion resulting from not knowing how to start or run a business. What tends to happen (especially with someone just leaving a 9-5), they are used to having the structure laid out for them and being told what to do each day. The tendency is to lose focus and say yes to too many things instead of focusing on revenue-generating activies. Startup entrepreneurs often don't know how to build a foundation for success, and so they set themselves up for failure. It is highly rewarding to help people put the right systems in place from the outset and avoid the hard and expensive path filled with unnecessary struggles.

 

What can affect both groups equally is health problems. When someone gets sick, they realize how much of the business depends solely on the efforts of one person. Many businesses go out of business or take an unrecoverable hit when the owner is knocked out of commission. Many business owners can't take a real vacation, because they have to stay glued to their phones and laptops the whole time. A good system is one that allows the owner to unplug without any disruption of revenue streams. A system also makes succession planning and exit planning much more manageable.

 

Courtney: What can you, as a consultant, offer that other consultants can't?

 

Dave: I think the most unique thing I bring to the table is my mix of professional skills. I spent my first ten years as an electronics technician and computer programmer, and my next ten years in the consulting arena, and the lion's share of my work was initially in marketing copywriting. This gives me a unique perspective for pulling apart business problems and developing solutions that other people might not think of.

 

When you write computer code, it forces your brain to rewire itself and think in terms of one simple instruction at a time. Computers are dumb machines. They will do exactly what you tell them to do, for better or for worse. As a programmer, I had to learn to break problems down into small pieces and write out the solutions as algorithms, one simple instruction at a time. I use that same basic approach when setting up processes and procedures for small businesses. I develop an algorithm for solving each business problem.

 

My other skill set is marketing copywriting, which is mostly a matter of speaking the customer's language. That's not easy, but I've developed some simple methods for uncovering what's important to customers. It starts with asking the right questions, and I've been told I have a gift for that. Being a consultant is not about telling someone what to do. It's about helping a client create a solution that they feel good about. Most people already have most of the knowledge they need to solve their own problems, but they just haven't looked at their situation from the right vantage point. A good marketing message should help them see things in a new way.

 


In addition to being an established local entrepreneur, Dave is one of the breakout speakers at the upcoming Triangle Small Business Summit, sponsored by Affordable Promos and The Bookkeeper. Dave will be speaking on Using Technology and Automation to Grow Your Small Business.


When you're hungry, E.A.T.

Every small business has, or should have a marketing strategy. If, like us, you sell to other businesses instead of directly to consumers, referrals are likely a huge part of that strategy.

I have seen small business owners put a lot of effort into obtaining referrals: they join networking groups, visit socials, and schedule 1-on-1s with various referral partners (or potential referral partners).

However, many business owners neglect to put any thought into their best potential referral source: current clients.

Now, asking a client for referrals is a delicate science. (After all, you've already asked for and obtained their business; it can feel presumptuous to ask for even more on top of that.) But if you are strategic, while continuing to put the client first, current clients can be an incredible pipeline for new business.

If you are hungry for new business, remember the acronym "EAT".

FSP - Earn laptop

"E"arn

This shouldn't need to be clarified but, in order to get referrals, you need to earn referrals. If someone is giving you a referral, they are sticking their neck out for you because, if you do a bad job, it reflects poorly on them.

This is especially true for clients, who should know better than anyone what level of quality service you provide. And if they are not completely happy with your service, pushing for a referral they don't feel you've earned may actually cause them to reevaluate their relationship with you.

FSP - Ask handshake

"A"sk

Asking for referrals can be awkward, but if you have a client who is thrilled with your services and is already telling you they're happy, it is reasonable to transition to a request for referrals at that time. It also never hurts to have a bonus for referrals, whether that's a discount, cash bonus, or a discounted rate for the client they're recommending. (Note: Some businesses can't receive cash gifts, but might still appreciate a gift basket or being taken out for a meal.)

Beyond asking the right way, you need to be thoughtful in your timing of asking clients for referrals. Don't ask for referrals right at the beginning of an engagement, as they have not yet had accurate time to reflect on your service. Also don't ask for referrals if the client is in the middle of a crisis you're helping to solve; their minds are not in the place to think of anyone who could use your business, and it is a bit manipulative to put that pressure on them when they are already stressed out.

FSP - Teach writing on board

"T"each

If your clients are very happy with you, they might want to send you referrals, but just don't know how. This can especially be true if your business is one that many people don't understand, or if you work with a wide variety of clients.

For instance, many of our clients and referral partners don't initially realize that, though we mostly work with established companies, we also work with very small and new start-ups. Once they found that out, several of my business friends told me, "I have someone who needs your help." The issue wasn't with a lack of referrals, but with a lack of education coming from me.

Keep your clients up-to-date on what you're working on, without being intrusive, and they will likely think differently about how they can refer business to you.


Guest Post: "What Does Marketing Strategy Have to do with Bookkeeping?" by Haley Lynn Gray

I have run across more than a few small business owners - some doing okay for themselves, others not - who take the shotgun approach when it comes to marketing their business. The first key is when they tell me that they have “The Facebook”, and they’re doing “ads”, and they are doing a bit of this and a bit of that.

I know that they are likely trying everything they come across, with little regard for the strategy and overall marketing plan. It’s not that I don’t believe in being spontaneous, or even getting creative with part of your marketing. But the reality is that nearly every piece of your marketing should come together; it should all work together, sort of like an orchestra.

6263-illustration-of-a-megaphone-and-announcement-text-pvIf you start running Facebook ads without a solid presence and good organic reach, the cost of your ads is going to be significantly higher, and the cost per client for acquisition is going to be dramatically higher. In some cases, I’ve seen the cost of a lead being 5-10 times the cost that it would be with a good organic strategy.

The same concept applies to Google Adwords. The lower your SEO ranking, and the less high quality content you have on your website, the higher your cost will be to advertise with Google Adwords.

I see people who toss up a landing page using Web.com, YP.com or others. Unfortunately, if you take this approach, you might be building links to a website that isn’t your own. It won’t help you get that organic reach for your website and you’re losing control of the process. You’ll also end up spending more money for fewer leads, and thus end up with fewer results.

It’s important to have a strategy with all the pieces coming together. Sometimes the tweaks can be tiny, like adding a clear call to action on every blog post, or making a point of collecting email addresses so that you can stay in touch with people via email campaigns. It takes strategy and planning to collect those email addresses and to execute a well thought-out marketing campaign. By thinking through how all of the pieces should work, and with help from a strategist if you need one, you can end up saving a lot of money.

Every business needs a strategy and a budget. So does a marketing plan. Everything should be measured, and data should be collected on how your system is performing so that it can be tweaked and improved. Do these steps for every aspect of your business and you will see savings and a healthier bottom line.


Haley Lynn Gray is CEO and Founder of Leadership Girl, a digital marketing agency, where she uses her skills as a sales and marketing strategist and social media expert to help small business owners grow their business.She combines her years of real-life and business experiences with her MBA from Duke’s Fuqua School of Business to benefit her clients. Haley works with them closely to set goals and put processes in place so they can achieve and exceed their goals.

Haley, along with her team, can also help with social media management, website updates, drip campaign management, and all aspects of business marketing.

In addition to running her business, Haley is a mom of four, a Girl Scout Leader and an author of two best-selling books. Haley is truly passionate about helping entrepreneurs achieve their potential, and empowers them to overcome obstacles in entrepreneurial ventures. www.leadershipgirl.com


Digging into Profitability

If you're paying even the tiniest bit of attention to your books, you are familiar with your Profit & Loss statement: namely, how much you are making or losing over a period of time (whether monthly, quarterly, annually, etc.). It's possible that you have broken out your income and expenses to great detail, but there is still additional information you could be missing out on.

There are methods by which you can measure the profitability of different segments of your business, depending on your industry and the composition of your company. That can allow you to focus on the most profitable aspects of your business, while identifying areas for growth. Here are some of the most common ways we dig deeper into profitability on behalf of our clients.

Job-Costingjob-costing

Job-costing is great for businesses who tend to work with a small handful of clients at a time, where the projects are long-term and clients aren't necessarily repeat customers. Job-costing is typically associated with construction, but can also be applicable for service-based industries that work on projects, such as large-scale marketing or software integration firms. In job-costing, each expense and revenue deposit is connected to a specific job, and P&Ls can be run by job, in addition to being run for the company as a whole.

Location-Based

Sometimes a company's business occurs in more than one place. Obviously, there are businesses such as dental practices, who have multiple offices. If those are managed independently, it makes sense to want to know the profitability of not just the practice overall, but of each individual location.

Location-based profitability tracking also works very well in the retail and service sectors. Anywhere one business has more than one location, they should be tracking how much money is location is making (or losing) for them. Additional education or possibly replacement might be necessary for General Managers who are not pulling their weight.

restaurantsFirms with Partners

Sometimes there are businesses in which multiple individuals work within one location, but functionally act as separate business entities. In some law firms, for example, partners operate within the same space cooperatively, but it is still valuable to see who is bringing in the most revenue for the firm, and where expenses are being allocated. There are also certain health clinics or spas where multiple partners may offer complimentary services, and it is vital to track the revenues from each avenue.

Class-Tracking

Some companies have what are really multiple businesses operating as one. For instance, a farm might sell directly to restaurants in one area, sell to grocers in another, and operate a produce stand from which the public may purchase directly. Assigning a class to each transaction (again, both revenue and expenses), can allow the farmer to see the profitability of each segment. Class-tracking is also great when selling both directly and for resale, as sales tax is only applicable on certain sales.

General Rulesclass-tracking

If you decide to implement additional levels of profitability tracking within your business, it is vital that you follow a few basic rules.
1.) Be consistent. Have an assignation for every transaction, every time. Otherwise, your data is inaccurate, and therefore, meaningless. (And it's been a waste of your time to do the tracking you have done.)
2.) Have clarity. Know exactly what your system will be for assigning transactions and have it written out, for either yourself or your bookkeeper. Make sure everyone who touches your financials is on the same page with the system.
3.) Be timely. We are always proponents of keeping financials up-to-date. However, this gets even more crucial when you need the additional level of detail required for profitability break-outs.

If you are interested in what profitability tracking might look like for your company, contact us for a free consult. We are happy to go over your financials and suggest ideas for growth and improvement.


Client Spotlight: Annelies Gentile, A Conduit for Change

 

We often like to make time to feature clients who have interesting experiences or businesses, whom we'd like to shine a spotlight upon. This week, our friend Annelies was kind enough to come by the office and share a bit of her coaching story. Here is that interview (edited for length and clarity).

 

This interview was originally published in our newsletter.


 

 

AMG2How did you get into coaching?

Before this chapter of my life, I was a hair and makeup artist to the stars. One of my clients was the former governor of North Carolina. One morning while taking care of her, she said to me, “Annelies (in a Southern accent), you should be a life coach.” And I said, “…What?” She said, “You always help me see things differently, you inspire me, and you make me see that I’m a part of something bigger. And I just heard of this new career called ‘life coaching’, and that’s what you do for me.”

I was already on the path to retooling towards a new career, as I was working on a Bachelor's and then a Master's. And so around that time, I took her advice and I began to research certification programs. And I chose to get my Master’s in coaching and my certification with the International Coaching Federation.

What surprised you most when you began your own coaching journey?

In a nutshell, what has surprised me has been how I have had to educate people on what coaching is to begin with. People know what a haircut is, they know what an oil change is, or a sandwich is, but people don’t understand coaching in relationship to their own personal and professional well-being and success. People also know sports coaches, which is the first analogy that I go to when I try to explain it. Coaching used to be available only to the elite and to high-performance professionals (like sports stars). It’s now available to the average business person.

What also surprised me was how saturated the industry is with sub-par coaches. So before I even get a chance to do my work, I have to educate people on what it is and how it will serve them.

How are you different from other coaches?AMG3

I have a Masters’ degree in coaching, I’m certified with the ICF, and my focus and process is in integrating the person in front of me, their resources, to help them own their situation, and excel beyond their expectations. You will be more than “changed” when you work with me; you will be transformed.

What do you feel is the biggest misconception people have about coaching?

That it’s not for them, it’s inaccessible, and unaffordable. But the reality is, it’s costing people a lot more to suffer than it would to actually do something about it

What does a client need to bring to be successful?

Curiosity and commitment. We can’t begin if you’re not committed, and we can’t continue if you’re not curious. Rumi once said, "There are many ways to kneel down and kiss the ground." And that is true for the coaching path for any individual, organization, or business. I’m determined to be the best co-pilot and catalyst that I can for my client, provided they are willing to show up, be curious, and be willing to explore what’s possible.

What’s the best way for a new client to get on your calendar?

No one calls anymore, so when someone calls, I’ll probably answer the phone. (laughs) They can also email me and we’ll book a time to talk. I want to hear what people are hungry for.

FinAMG1d Annelies on the web at www.conduitforchange.com.


The 3 Most Common MLM Tax Myths

Multi-level marketing companies (MLMs) have exploded over the last decade. Tens of millions of Americans participate in MLMs or "network marketing". There have been countless articles written over both the potential risks and successes of these companies, so we're not going to dig into that debate. The fact of the matter is, like with any industry, some people make money in multi-level marketing, and some people don't.

What we are interested in, however, is the preponderance of tax myths we see bandied about when it comes to network marketing. New MLM participants are often encouraged to take advantage of myriad deductions that will open up when they start their own business, and are promised significant tax savings.

Unfortunately, it's our responsibility to set the record straight on that.

Here are the three (inaccurate) MLM tax beliefs we see most frequently...

 

Mileage Auto DeductionsIf you put an advertisement on your car, all your vehicle expenses are deductible!

If this was true, every person should just file a d.b.a. and slap the name of their "company" on their vehicle, because the tax savings would absolutely be worth it. Unfortunately, it's not true. However, we still talk to many new clients who have heard this.

This myth is so pervasive, in fact, that the IRS put out a special note on it in their 2016 version of Publication 463 (which pertains to transportation deductions). A vehicle wrap is not a free pass for the government to pay for all of your fuel purchases for the year.

However, the cost of the car advertisement itself is fully deductible as a marketing expense. Also, your business mileage (excluding commute) is still deductible.

 

Meal DeductionsYou can write off all your meals!

Don't go crazy on eating out, thinking you'll get it all back at the end of the year.

For one thing, business meals are limited to those which are not considered "lavish or extravagant". For another, except for under very specific conditions, meals are only 50% deductible. So you can still lose a lot in meal expenses if you aren't careful.

Also, don't try to classify every meal as a "business" meal. Meal deductions are frequently abused, and can show up as a "red flag" to the IRS.

Loss on TaxesIt doesn't matter if you aren't making money...Just write off the loss!

Bad news: The IRS isn't dumb.

There was an actual case that came about due to a couple who were involved with Amway as a hobby. They threw extravagant parties for their friends, ostensibly for the purpose of selling Amway products, and claimed the losses on their taxes each year. That's when the IRS came in with hobby law.

Hobby law specifies the conditions under which your business can be reclassified as a "hobby". There are various criteria involved, but one major aspect is failure to turn a profit year after year. Regardless of the type of business, if your business is facing long-term failure, that is a problem.

 

If you have questions about how to handle your MLM business's accounting, don't take the word of your friends or upline. Talk to a professional, so you don't run into trouble.


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Networking: What's Worked for Us

I know this will probably get lost in the sea of thousands of articles telling you how to be a better networker. But if you're reading this, it's likely that you are at least passingly familiar with The Bookkeeper. We get asked frequently how we grew our business so fast, and networking is certainly a component of that.

When it comes to networking, here is what has worked for us over the last three years.

 

Know your message.

women presentingA friend in marketing once told me, "Don't tell people how you're better. Tell people how you're different." We expended a lot of energy, early on, in trying to present the image we thought a serious bookkeeping company should have. (I, in particular, in an effort to look older, adopted a uniform of all-black, conservative clothing with my hair in a perpetual bun.) People didn't respond to the image we were putting forth because a) it wasn't genuine and b) they had seen it a thousand times.

Success came when we nailed down who we are, specifically. We're the company who does high-standards bookkeeping, but then also uses the information the books provide to do so much more for our clients. Once people found out that we did things like pricing strategy, forecasting, or even just filing 1099s, they got a lot more excited about our business.

Knowing exactly who we are has also helped us pinpoint who our ideal client is. In networking, it's easy to say, "My ideal referral is anyone!" But that really does not help the people who are trying to send you referrals. Yes, we would love to work with just about any small to mid-sized business. However, our ideal referral is really a potential client who is willing to listen and follow guidance; otherwise, they wouldn't be taking full advantage of our services.

Narrowing the scope of your business, as opposed to using a "shotgun" approach, helps your message penetrate deeper in your audience's mind and leave a lasting impression.

 

Mix it up.

Every company officer at The Bookkeeper has membership in a seat-specific networking group (i.e. a group where we're the only bookkeeper represented). Some of us are in more than one. And we demonstrate reliability to those groups by honoring the attendance requirements, but we also try to keep our routine fresh. Changing up our 60-second "elevator pitch" (a short spoken commercial about the company) week-to-week helps, as does bringing visitors or sending substitutes when we're absent. If we were to come and make the same speech week after week, the members of our groups would learn nothing new about us. Sometimes, just wording our pitch a little bit differently can spark something in another member's mind to make them realize, "Ah, I have a referral for them."

We've also found it helpful to break outside of our own groups. Visiting other groups, even if they have a member who might be considered "competition", is valuable. Not all bookkeepers work with all types of clients, and we frequently receive referrals from other bookkeeping companies who don't do exactly what we do. Night networking, which is typically more casual, can be beneficial as well. This is particularly good for those who are nervous about public speaking, as there's never a moment when you have to stand up and be the center of attention. And, since many small business owners are still working day jobs while they grow their own business, you get to meet a different set of people.

 

Follow up!

phone callYes, every bit of networking advice includes this, but only because it is so important. If someone meets 100 new people in an evening, how can you expect them to remember you long-term unless you remind them?

In a networking situation, you're not getting to spend much time with each person. The real work comes after that initial meeting, when you follow up with a 1-to-1. The one-on-one follow-up meeting is where you get to really show the person why you're interested in their business and what you have to offer, to them or referrals.

However, 1-to-1s don't have to be strictly business. It's always good to take a more professional tone with someone you're just getting to know, but it's also great to "touch base" with close referral partners. That can be an office meeting, but it can also be meeting for drinks or going to watch a game.

 

Come to serve, not to sell.

"Show, don't tell," works as well for networking as it does for storytelling. Someone who spends their entire time networking telling everyone how great their services are is off-putting, and has not yet earned enough trust to make those claims believable. Someone who shows that they are a competent and honest individual, by helping others within the group, commands respect.

One of my favorite things in networking is when I identify someone who would be either a good vendor or customer for one of my clients. Without a word of self-promotion, I'm empowered to benefit two businesses within my networking circle. Though it doesn't result in immediate business for my company, I still consider it a win-win, because it benefits my client, and it helps me to make a good connection with someone who could be a future client or referral partner. By referring them to each other, I am demonstrating my value to both.

Serving others also gives them a great opportunity to return the favor. No one enjoys 1-way relationships; you have to show a willingness to put others' needs before your own, and the right people will honor that by sending business back your way. However, that does not mean you help others only with the intention of getting something in return. Which leads to our final point...

 

Be real.

handshakeThere is this tendency in new networkers to act like they have everything together, all the time. And while you do need to be professional and not falling apart during a networking meeting, it is also okay to be honest about business challenges you're facing. Keeping a perfect veneer can be very unsettling to the people you meet, and you will find that you form better bonds when you allow people to help you.

No one has it all together, and people recognize that. You will never lose business just because you're human. If you do, it's not business you really want to have.